Topic: Leadership Style and Employee Empowerment
Author(s), Title and Publication
Men, L. R. (2010). Measuring the Impact of Leadership Style and Employee Empowerment on Perceived Organizational Reputation. Institute for Public Relations.
This research examined the impact of organizational leadership on internal communication. Specifically, it built links among leadership style, employee empowerment, and employees’ perceptions of company reputation. An online survey was conducted with 166 employees from diverse work units of a Fortune 500 company in the United States to measure leadership style (transformational leadership vs. transactional leadership), employee empowerment (competence and control), and perceived organizational reputation by employees. A structural equation model (SEM) was used for data analysis.
The results showed that transformational leadership positively influenced employees’ perceptions of company reputation directly or indirectly by empowering employees. Transactional leadership, represented by contingent reward behavior, demonstrated a significant negative effect on employees’ perceptions of organizational reputation. This study also examined the relationship between employee empowerment and employees’ perceptions of reputation , and found that employees who feel they have more ability to perform, or more control in decision making, tend to evaluate organizational reputation more favorably. In addition, employees’ feelings of control play a more important role than do feelings of competence in predicting their evaluation of reputation. Regarding the linkage between leadership style and employee empowerment, results showed that both transformational leadership and transactional leadership are positively associated with employees’ feelings of control; transformational leaders are more likely to delegate power to employees and involve them in decision making than are transactional leaders. However, style of leadership was not significantly related to employees’ feelings of competence. Also, higher-level managers were more likely to demonstrate transformational leadership than lower-level managers. The value of the study is limited in that is a case analysis of just one company.
Implications for Practice
Organizations might increase employee empowerment and enhance internal communication if they 1) educate and engage organizational leaders in relationship-oriented transformational leadership behaviors, and 2) develop systematic leader communication training programs to build an effective communication system and empowered culture.
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